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Easing the Flow: Thinking about the River Murray like an Urologist. 2007 Harry Harris Oration Urological Society of Australia and New Zealand. Prof. Mike Young Research Chair, Water Economics & Management The University of Adelaide. Adelaide Convention Centre, 21 st February 2007. - PowerPoint PPT Presentation
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2007 Harry Harris OrationUrological Society of Australia and New
Zealand
Prof. Mike Young
Research Chair, Water Economics & ManagementThe University of Adelaide.
Adelaide Convention Centre, 21st February 2007
Easing the Flow:Thinking about the River Murray like an Urologist
SOME COMMON MYTHS
3
Tonight you will eat a lot of water!
1 cup of lettuce 11 litres
1 slice of white bread 28 litres
1 bottle of wine 360 litres
1 potato 500 litres
8 oz steak 4,660 litres
Standard meal: mignon veal, red onion, basil, potatoes with 2 glasses of wine:
Approx. 5000 litres!
Plus Rasberry Tart & Walnut Brittle Icecream
4
Water withdrawals per capita
0
1000
2000
3000
4000
5000
6000
Au
stralia
Un
ited K
ing
do
m
New
Zealan
d
Iraq
(Australia = 135/161 countries)
5
PRICING RECYCLED WATER
Great variability – there is no transparency
RECYCLED WATER PRICES
Northern Adelaide Plains - Virginia 7-15c/kL*
Sydney – Rouse Hill 28c/KL ( incr. use)
Ipswich Water – Springfield 43c/kL
Christies Beach – Southern Vales 53c/kL*
SOPA / Newington 83c/kL
DRINKING WATER - Sydney Water (bulk) 98c/kL
Ride citrus sports water (500mL) $6600/kL* Supplied to reticulator by STP operator without charge
6
The Real Cost of Recycling
•Ipswich Water Springfield (consultant) $1.45/KL
•SOPA Olympic Park (operating cost only)
(SOPA) $1.60/KL
•Cost, integrated hydrological system (consultant) $2.50/KL
•Melbourne Eastern STP (consultant) >$3.00/KL
•Rouse Hill (Sydney Water) $4 to $7/KL
7
Options - If it stacks up do it
Full cost pricing for infrastructure, including externalities. We can’t afford the costs of a grant-based system.
WATER SUPPLY AND THE DROUGHT
9
Australia has a problem
Drought and …
Evidence suggests a step change in weather patterns and …
Science is warning of further adverse change and …
The last 50 years have been wet and…
This is when we built our cities and built our thirst for water
Impose pre 1950s rainfalls on Australia and we have a very serious problem!
We may have to get by with a lot less water
Sydney, Brisbane, Melbourne, Adelaide, Perth, Toowoomba, Gosford, Goulburn, Bendigo, Ballarat
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Less rain means much less water!
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Ra
infa
ll (
mm
)
14% less 20% less
Rainfall for Jarrahdale
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1000
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Str
ea
mfl
ow
(G
L)
N o te s : S tre a m flo w is fro m Ma y o f la b e lle d ye a r to th e fo l lo w in g Ap ri l
48% less
66% less
S tre a m in flo w fo r P e rth d a m s (P rio r to S tirlin g D a m )
PERTH
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Warragamba + 3 Nepean Dams (Inflows & annual rainfall)
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
Year
Inflo
w GL
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
Rain
fall
(mm
)
892 GL pa
2,027 GL pa
572 GL pa
780 mm pa 907 mm pa 681 mm pa
Sydney
13
Climate shifts occur
8yrs. 11yrs.
A drought, Australia should have expected (not a 1 in 1,000 years event)
14
River Murray Inflows GL
Average infl ow 2006
% of previous
mimimum
july 920 154 GL in 1967 130 84%
august 1360 125 GL in 1902-03 120 96%
sept 1558 178 GL in 1902 112 63%
oct 1100 139 GL in 1914 74 53%
nov 650 55
dec 312 34
jan 52 GL in 1983 30 58%
Total 4938 596 555 93%
Previous lowest monthly
infl ow bef ore 2006
15
River Murray Inflows 2007/8 Worst Scenario
By May 2007, all Murray System dams empty
2007/8 inflows => 1,000 GL &
South Australia get its 1/3 => 333 GL
But SA system evap. + losses => 1,300 GL
Balance – 967 GL
Add back Wellington Weir + Lake Bonney & triage L. Alexandrina and L. Albert + 1,100 GL
Available allocation to cities, vines, etc +133 GL
THE RIVER
17
System Plumbing
18
StorageLand use Water Yield
River
Wetlands
Rainfall
Ground water
Base flow
Surface Drainage
GW Recharge
Water Extraction
Irri
gati
on
, u
rban
&
ind
ustr
ial u
se $
xx
x
Water accounting 101
x
x
19
Possible reduction in mean annual River Murray flow as a result of incomplete
accounting (baseline 1993/94)Unmanaged flow reducing effect Nett
effect
Water use efficiency savings - 723 GL
Reduced water yield (Trees and dams) - 600 GL
Salinity Interception Schemes -20 GL
Increased groundwater use -349 GL
Estimated nett reduction in mean river flow and allocations to irrigators -1,692
GL Add back 500 GL ?????
20
100 ML
Unconfined Aquifer
50 M
LWater that returns to the aquifer
Extraction
45 ML
Actual amount used
5 ML
Evapo-transpiration
Drainage
Gross entitlement = 100 MLReturn = 50 ML
Recharge Credits for return flows
WATER LICENCES AND TRADING
Robustness
Robust (adj.) Said of a system that has demonstrated an ability to recover gracefully from the whole range of exceptional inputs and situations in a given environment.
One step below bulletproof. Carries the additional connotation of elegance in addition to just
careful attention to detail. Compare smart, oppose brittle.
Robust systems Endure without the need to change their foundations. They last for centuries. Inspire confidence. Produce efficient and politically acceptable outcomes in
an ever changing world.
23
Casting the Net Critical Concepts
1862 – Companies Act Limited Liability
1857 – The Torrens Title System
?000 - The Banking System
Jan Tinbergen – 1st Nobel Lauriat in Economics
24
Whereas the inhabitantsof South Australia are subjected to loses, heavy costs, and much perplexity, by reason that the laws relating to the transfer and encumbrance of freehold and other interests in land are complex, cumbrous and unsuited to the requirements of the said inhabitants, it is therefore expedient to amend the said Act
25
Periodic Allocations & Trading
26
Allocation Trading
Pay ____________________________________________
The sum of ________________________________ ML of 2000/01 Water
Water Trading Australia
Signature______________________
807512 085 249:0223 7851
Date ____________
________ML
WPayBPay
27
A Robust System
Water
Tradeable Rights Price
Single Title to
Land & Water
Land
Entitlement Shares
in perpetuityBank-like Allocations
Use licences with limits & obligations
Channel Capacity Shares
Channel Capacity Allocations
SalinityShares
SalinityAllocations
Solution for Solution for C21?C21?
28
Water as an investment
OVER ALLOCATION
30Source: Goode 2006
31
Annual diversions
No plan to cope with climate shifts
32
Over allocation
Exists because Entitlements are defined in volumes and not as
shares of available water in a pool
Plans assume that constant technology and land use change
Introduction of trading that activated previously unused water
Solutions Buy back
Pro-rata reduction
33
Illustrative buy back offer form
Type of Licence South Australian River Murray Licence
Offer conditional upon lease back of water until …..
Offer 1 …………….. ML @ not less than $2,300.00 per ML
Offer 2 …………….. ML @ not less than $2,100.00 per ML
Offer 3 …………….. ML @ not less than $2,000.00 per ML
Offer 4 …………….. ML @ not less than $1,950.00 per ML
Offer 5 …………….. ML @ not less than $1,900.00 per ML
Signatures
Licence holder …………………………………………
Registered interest (if any) …………………………..
GOVERNANCE
35
Six Governments in action
Victoria
NSW
Snowy Hydro
ACT
36
A way forward
Concepts on the table Commonwealth takeover via referral of powers
Run the system as one ground and surface water
Independent management with strong accountability to community and parliaments
Skill-based members
Minister can direct but only in writing and the gazette
A solution?
1. Independent Authority under Commonwealth
2. Environment Trust to hold water
3. Infrastructure manager to keep the system running
37
MDB Authority functions and powers
s. 9 The Authority, in the performance of its functions, must Ensure over-allocation does not recur
Efficient and cost effective management
Maximise economic efficiency in use of MDB water
Ensure accountability
Achieve cost-recovery targets
s.10 The Commission must do all things that are necessary or convenient to be done for, or in connection with, the performance of its functions.
38
Thinking like a Urologist
A simple way forward A system that adjusts allocations in harmony with the
available supply
A 200GL minimum flow through Mouth
A little for the Coorong every year
SA’s high security entitlements combined with NSW and Victoria’s and Adelaide’s urban water tradeable
Carry over for all water in all States
Binding power referral only when over-allocation solved
A governance arrangement that guarantees that over-allocation does not recur!
The future depends upon us
Contact:
Prof Mike YoungWater Economics and ManagementEmail: [email protected]: +61-8-8303.5279Mobile: +61-408-488.538 www.myoung.net.au
